O-LevelEconomicsThe allocation of resources2281/11 · May/June 2022 · Q161 Mark

What is an advantage of a country having a market economic system with a large private sector?

AFirms can become unprofitable if they do not produce what consumers want.

BMarket forces often fail to ensure maximum benefits for society.

CSome goods may not be provided at all or not in sufficient quantity.

DThere is an unequal distribution of income which can increase over time.

✓ Correct answer

A: Firms can become unprofitable if they do not produce what consumers want.

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2022 Paper 1 Variant 1, question 16.

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